Scott Bessent, U.S. Treasury Secretary

Strong values, strong opinions, the Mike Brumet Show, KTAR News 923, and the KTAR News app. Yesterday afternoon, we had a conversation yesterday evening with Scott Bessent, the Treasury Secretary, after an event in Casa Grande. So I want you to hear this in two parts. Here's the first part of my conversation with the Secretary. In Arizona today, as you can see, it is a Secretary of Treasury. Scott Bessent is with us. First of all, Mr. Secretary, thank you so much for doing this. Mike, it's great to be out here in Arizona. I watched the press conference today at the event in Casa Grande coming to Arizona for this event. Why Arizona and what is it that? we need to know what happened today well look i i think it's great one of the highlights for me is coming out and seeing the effects of the president trump and this administration policies and that as uh um we talked about at the press conference it's policy and how it makes its way to the people. And I have said that the tax bill, which was done last year, some call the work in families tax cuts, some call the one big beautiful bill, but it's really a barbell. So on one side, you have great corporate incentives, full expensing for factories and equipment for farm structures. And on the other side, you have the presence for signature policies, no tax in tips, no tax in overtime. reduced tax and social security and deductibility of auto American-made autos. So it's really that plant itself was a microcosm because they were saying that because of the tax bill, they expanded, they renovated, and then many of the employees there were saying they love the overtime deduction. And for the event today, talking about the paid family leave extension, I was a small business owner. I was a contractor for a long time before I got into the media business. And people don't understand. how much you want to take care of your employees and do things for them so they can take care of their families, but sometimes it just wasn't affordable for a small business owner to provide things like that. How does this help businesses provide for their employees? So people respond to incentives, and that's what we're trying to do. On one hand, we try to get out of the way, and then on the other hand, we try to have tax incentives deductions for good policies. So Treasury gave guidance this morning, so the big, large... Small employers who want to have paid family leave benefits for their employees, whether it's for sick relatives or for children, can now deduct those expenses. So it's much more beneficial for them to do it, or they can buy insurance. And are they able to deduct with the insurance? Are they able to deduct some of those costs if they have the insurance? Surely. And see, that to me just seems like common sense helping businesses. provide for their employees. I'm always listening to small business owners saying, if I had more of my own money, I would expand my business. I would pay my employees more. I'd up the benefit package because it seemed like business owners are always reinvesting in their business. Well, it's also, it's that...

Workers have choices. And as you said, especially small business owners want to do the right thing. And we wanted to provide incentives for them to be able to do that. Just like with the Trump accounts, we're seeing many employers now are. They're contributing to their employees' Trump accounts for their children. So anyone can open an account for children under age 18, and employers can put in up to $2,500. And since you brought that up, the genius of this, in my opinion, is I didn't learn as a kid. We didn't have any money, so I had never learned about money. And I look back in my life and said, if I had started saving sooner, how much better off I would have been, is we're going to talk about housing and mortgage rates and a down payment for houses or college. Being able to jumpstart these kids' lives by doing it at such a young age has got to be, the benefits of this are going to be seen 20 years from now. Look, I think we're going to see it right out of the box, and then it's really going to crystallize 20 years from now. 38% of American households have no stake in our great equity markets. They don't participate in the growth. They don't participate in the innovation. And they don't participate in the markets. And President Trump wants to create an ownership society. And I think this is a way to do it. And, Mike, to your point, I think this is the ultimate real-time learning for financial literacy. And in contrast, it was never easy managing your finances. But in contrast to when you and I were kids, there's so many other alternatives now. They're digital assets. They're buy now, pay later, which is very complicated. All kinds of... credit alternatives on mortgages, is it better to rent? Is it better to buy? You know, how should you finance an auto? And with these Trump accounts, kids are going to be able to, when they turn 18, they can either take the money out, use it for college, start a business, down payment on a car, a house, or they can roll it. and into an IRA that they can then keep tax free until they're 60, 65. And that financial security, when they get older, it gets people moving through the job market so the younger generation behind them can come into the market that we're not stuck top-heavy because people aren't prepared for retirement. Yeah, exactly. Exactly. And is just having control of your finances. I see surveys that show that kind of people 40, 50 and up, one of the biggest sources of economic anxiety is their economic future. What is it going to look like? How do I retire? So I think this is a great start. And it's a great lesson in compounding over time.

One of the conversations, obviously, is about inflation and what's happening in the country and the phrase bifurcated economy. How does the One Beautiful Bill Act address that when it comes to no tax on tips? When it comes to, I think, the service industry and how they're benefiting from that, is this addressing that issue? for those families? Well, it already has. So the, you know, it called the bifurcated economy, the case-shaped economy. And that has ended that 13 months on from the one big, beautiful bill, we are seeing that just like in President Trump's first term, the bottom 25% of wage earners have done better than the top 25%. Bottom 25% over the past 12 months. their incomes have increased 5.5%, almost three times the top 25%. So look, we're not happy with the inflation numbers. I think that core inflation remains low. Prices will come, energy prices will come down. We'll get to the other side of this Iran conflict. But in the meantime, the bottom 25% of workers, they've made... of 5.5%. Inflation has been 3.5. So that's 2% real wage increase. I'd like for it to be more. I think it will be more when energy prices go down. But this is the result of... workers being able to keep more of their money. And it was fascinating on Tax Day, April 15th, everybody's favorite day. Yeah, everybody. I also oversee the IRS as the Treasury Secretary. I went with the president of Las Vegas, and I thought Las Vegas would be the tip capital of America. And the president... did what he always does at rallies, and he wanted to hear kind of a decibel level vote. And he went through with the four policies. And I thought in Las Vegas, surely did tips, but by far it was overtime. Right. And that's what we saw today at the Frito-Lay factory in Casa Grande. Workers very excited about the overtime. And I did a small business roundtable out in Seamy Valley, California. And it's not only the workers who were excited about the overtime. It's employers because you have great employees. And. They voluntarily want to work more hours because they're keeping more of it. It's the American way. You want to work harder, keep more of it. And I'm glad you're saying this because that was my world. I grew up as an electrician. So I worked where I was an hourly worker. But I worked whenever I was asked, the potential to keep more of my money is just the incentive that I'm going to be able to keep more of this. I'm going to see the benefit of this longer. Plus, I'm going to put it right back into the economy.

It just seems like a no-brainer. Yeah. And look, it's an immediate fill-up. And we saw last year workers did not take the deduction and did not change their withholding. So we saw very large income tax refunds this year. They were up about 10, 13%. And that doesn't track the people who... paid last year and got a refund this year. So as I travel across the country, I hear from people who said, I paid $3,000 last year and I got a $3,000 refund this year. Is it about changing the narrative? Is it the messaging of what you're doing when you travel the country? Because when you say that the bottom 25% is doing better than the top 25%, I don't know that that's the narrative that we're hearing in a lot of the media or that what people feel is actually going on. Well, look, I think I am happy to run on this this time because... There's a lot going on out in the world, but you see these consumer numbers are very skewed. The Republicans say consumer confidence 80. The Democrats say eight, and you end up with this. off kilter number. And I am not minimizing what working people are feeling. But what I am saying is that in the past year, we have seen an improvement and we are going to continue seeing that improvement. And look, I also think you got to ask yourself, why is the bottom 25% doing better? Did it have something to do with closing the border? Whatever the number was. 10, 15, 25 million illegals come across and take Americans' jobs, then 2 million, 3 million go home, then supply and demand still works in the labor market. So two more questions very quickly. One has to go back to the business side of this. I believe that if we're going to see people benefit and the working class benefit, we're going to have to see wage growth far outpacing inflation. So we want inflation to drop. But don't you think that the growth economy where people are competing for the employees, that that drives up wages and that? organically is what businesses will do to help grow the economy. Well, that's what we've seen this past year, and that's what we saw in President Trump's first term. And that's exactly right, because the president always said, I could create a million, two million government jobs, but those don't, those only keep up with inflation. You can't outpace inflation. I want to tell you the number of people who I spoke to it at the Free to Life Factory today who said, I started out.